The Journal of The DuPage County Bar Association

Back Issues > Vol. 11 (1998-99)

U.S. Supreme Court - 1997 Term Cases of Significance to Local Practitioners
By Leonard B. Mandell

The U.S. Supreme Court heard arguments in ninety-four cases this term. The Court’s decisions this year will not likely rewrite Constitutional Law casebooks, nor will they provide law professors with an abundance of material for those exciting law review articles. Rather, the Court dealt mainly with issues familiar to general practitioners stemming from the everyday problems of average citizens.

One area of concentration was sexual harassment. In a veritable CLE course on the subject involving four separate cases, the Court held that Title VII prohibits same-sex sexual harassment (Oncale v. Sundowner Offshore Services, Inc.) and that school districts are not liable for a teacher’s harassment of a student unless a high-ranking official knew about it and failed to respond (Gebser v. Lago Vista Independent School District). The Court also held that employers may be vicariously liable for sexual harassment caused by immediate supervisors even when the employee did not suffer demotion or job detriment. However, an employer can defend such a claim if it has procedures in place to identify and correct the harassment but the victim failed to follow those procedures (Faragher v. City of Boca Raton; Burlington Industries, Inc. v. Ellerth).

Other cases involving changes in the workplace were a COBRA insurance case (Geissal v. Moore Medical Corporation) and an age discrimination case (Oubre v. Entergy Operation, Inc.). Two decisions were handed down in cases involving HIV discrimination: one in a dentist’s office, and another in a prison under the Americans with Disabilities Act. In addition, the Court looked at several criminal cases and considered the issue of damages resulting from crashes in high-speed police chases (County of Sacramento v. Lewis). And, not to shortchange the scholars, the Court ruled that the Line Item Veto Act was an unconstitutional violation of the separation of powers doctrine (Clinton v. City of New York).

Of course, many attorneys do not practice constitutional law on a regular basis. However, the Court did decide several cases which affect lawyers directly and others that may arise in their daily practice of law. With that in mind, this article details five U.S. Supreme Court cases for review.

I. Attorney-Client Privilege

Swidler & Berlin and James Hamilton v. United States, 66 U.S.L.W. 4538 (1998)

ISSUE: Can You Take It With You?

DECISION: As various investigations into the 1993 dismissal of White House travel employees began, Deputy White House counsel Vincent W. Foster, Jr. consulted with attorney James Hamilton from Swidler & Berlin seeking legal representation. Hamilton took three pages of notes during their conversation. Unfortunately, Foster committed suicide nine days later.

Despite the well-recognized attorney-client privilege that protects confidential communications between a lawyer and a client, the independent counsel, the Hon. Kenneth Starr, while investigating the firings, gained subpoenas from a federal grand jury seeking several items, including Hamilton’s notes from his conversation with Foster.

Hamilton moved to quash the subpoena, citing protection from disclosure by the attorney-client privilege. The District Court sided with Hamilton and denied enforcement of the subpoenas. However, the Court of Appeals for the District of Columbia reversed, noting that although most courts allow the privilege to survive the death of the client, that right was not absolute. The court cited the exception for testamentary disputes among heirs as a starting point for its analysis. The court then employed a balancing test and concluded that posthumous disclosure, when the communication was significant in a criminal matter, would not chill the client’s communication, and the value of the disclosure outweighed the harm. The court created a posthumous exception to the privilege "for communications whose relative importance to a particular criminal litigation is substantial." Therefore, the court concluded that Hamilton’s notes were not privileged.

The case gained fast track status and was quickly set for oral argument in the Supreme Court. Seventeen days after oral arguments, Justice Rehnquist delivered the Court’s decision, reversing the Court of Appeals and granting Hamilton’s notes protection pursuant to the attorney-client privilege. The Court noted that the attorney-client privilege has been overwhelmingly accepted for well over a century and the weight of authority protects a client’s confidential communications after the client’s death. The Court acknowledged the testamentary exception, but was unpersuaded by the independent counsel and the appeals court that a new exception and a departure from the common law should be created.

The Court reasoned that, in a will contest, the client’s intent is central and an implied waiver is recognized to further the client’s intent. In the criminal context, not only is a waiver not implied, but such a waiver would eviscerate the intent of the client and effectively dissolve the privilege that is designed to allow a client to communicate fully and frankly with counsel, without fear of disclosure during the client’s lifetime and beyond. Moreover, clients may be even more fearful of posthumous disclosure, as it may taint their reputation and could be harmful to friends and family. In short, the privilege trumped every argument made by the independent counsel as the Court determined that he failed to demonstrate a sufficient reason to overturn the common-law rule and the prevailing case law.

BOTTOM LINE: Hamilton’s notes from his conversation with Foster are privileged and protected; President Clinton wins the battle but the war with the independent counsel continues.

II. IOLTA—Takings Clause

Phillips v. Washington Legal Foundation, 66 U.S.L.W. 4468 (1998)

ISSUE: Whose Interest Is It Anyway?

DECISION: Traditionally, lawyers held funds for their clients in trust accounts, usually pooling them in non-interest generating checking accounts. In 1980, Congress created Negotiable Order of Withdrawal (NOW) accounts, which are interest-bearing checking accounts. Because the individual amounts usually held for clients did not generate enough interest to cover expenses, lawyers continued to pool the accounts, which generated "net" interest. Ethical restrictions prevented lawyers from retaining the net interest from the NOW accounts.

With plenty of interest accruing with no place to go, individual states created Interest on Lawyers Trust Accounts (IOLTA) programs to provide legal assistance funding for low-income persons. All fifty states developed this funding source, some voluntary and others mandatory.

In 1984, the bar regulators in Texas began a voluntary IOLTA program that became mandatory in 1987. Thus, attorneys who received client funds that were insufficient to generate enough interest to offset the costs of maintaining a separate account, placed them in an IOLTA. IOLTA income was paid to the Texas Equal Access to Justice Foundation (TEAJF), which dispensed the earned interest to help finance legal services for low-income persons. Clients whose funds were maintained in an IOLTA did not control or direct the interest and paid no taxes on the interest.

The Washington Legal Foundation, a public-interest organization with Texas members, including a Texas attorney who deposited client funds in an IOLTA, and a Texas businessman whose retainer had been deposited in an IOLTA, joined forces in opposition to the program and filed suit against TEAJF. Its basic allegation was that the IOLTA program violated its members’ rights under the Fifth Amendment, which states that "private property shall not be taken for public use, without just compensation." U.S. Const., amend. V, cl. 3 (Takings Clause).

The District Court granted summary judgment in favor of the Texas bar, holding that the parties challenging the IOLTA program had no property interest in the IOLTA income. However, the Court of Appeals for the Fifth Circuit reversed, reasoning that the interest generated belonged to the owners of the principal, i.e., the clients.

Acknowledging the Texas law and common law which provided that interest—follows—principal, the Supreme Court affirmed the judgment of the Fifth Circuit. ("Interest shall follow the principal, as the shadow the body.") The Court held that interest earned on client funds in IOLTA programs is the "private property" of the client for Takings Clause purposes. However, the Court remanded the case to the lower court to determine whether the funds had been "taken" by the state and the Court refrained from expressing an opinion as to the amount of "just compensation," if any, that was due.

BOTTOM LINE: After lower court review, this case could return to the Supreme Court. In the interim, funding for public-interest organizations such as the Legal Services Corporation, like IOLTA programs themselves, rests on unstable grounds.

III. Search and Seizure

United States v. Ramirez, 66 U.S.L.W. 4169 (1998)

ISSUE: To Knock or Not to Knock, That Is the Question.

DECISION: On November 2, 1994, federal inmate Alan Lawrence Shelby, while en route to testify at a state criminal trial, slipped out of his handcuffs, knocked down a deputy sheriff, and escaped from custody in Portland, Oregon. Shelby was facing a term of 248 months of incarceration in a federal prison, and he had declared that he would "not do federal time."

This was not the first time this modern-day Houdini had escaped or tried to flee from custody. One time he struck an officer, kicked out a jail door, stole a car, and rammed a police vehicle in his flight from custody. On another occasion, Shelby attempted to escape by using a rope made from torn bed sheets. In the past, he had threatened to kill witnesses and was reputed to have tortured an individual with a hammer.

The authorities, obviously concerned with finding Shelby quickly, sent out a press release about the escape. The next day, a reliable confidential informant contacted the Federal Bureau of Alcohol, Tobacco, and Firearms and told Special Agent George Kim that the day before he had seen a man he believed to be Shelby at the home of Hernan Ramirez.

Agent Kim and the informant drove to the area of Ramirez’s home. From a distance they saw a clean-cut person wearing a blue jumpsuit; the man appeared "very similar to" a photograph of Shelby. It was the same man the informant saw the day before. A deputy marshal also went to the Ramirez home and observed a clean-cut man in a blue sweat suit exit. The deputy concluded it was the same man Agent Kim had seen—presumably, Shelby.

The next afternoon, a federal magistrate issued a warrant authorizing police to arrest Shelby at Ramirez’s home. The informant, who claimed to have seen Shelby there, also indicated that several firearms were in the garage. Actually, no firearms were in the garage, and the informant had not seen any there.

The police, 45 strong and armed with the arrest warrant, mounted an early-morning raid on the Ramirez home on November 5 at 6:15 a.m. The group included city, county, and state S.W.A.T. teams. The officers announced over a loud-speaker that they had a search warrant. However, without waiting for a response, an officer broke the window of a garage door and began waving a firearm inside.

Meanwhile, Ramirez, his wife, and their 3-year-old child were asleep. Ramirez awoke to a series of unusual sounds, including the breaking of glass. Ramirez thought burglars were attempting to break in and had no idea that it was the police seeking entry. Fearing for his family’s safety, Ramirez grabbed a pistol from a utility closet and fired it toward the garage in an attempt to scare the intruders. The officers fired back and shouted, "police."

Realizing that police officers were entering his home, Ramirez ran to the living room, threw the pistol across the floor, and laid down prone in a "frightened state." Ramirez was arrested, but Shelby was nowhere to be found. By 6:35 a.m., Ramirez and his family exited their home in police custody.

Based on the shot Ramirez fired during this episode, a second warrant was issued and the gun Ramirez fired and another gun were seized. Unfortunately for Ramirez, he was a convicted felon and that led to his indictment as a felon in possession of a firearm in violation of 18 U.S.C. § 922 (g)(1) (1994). Thus began Hernan Ramirez’s odyssey from a peaceful slumber, through the judicial system, to the Supreme Court.

The United States District Court for the District of Oregon, in an unreported opinion, refused to permit the Government to use the two firearms as evidence on the felon-in-possession charge. By a two-to-one vote, the Court of Appeals for the Ninth Circuit affirmed. The court reasoned that any exigency the officers faced was insufficient to justify a no-knock entry causing property damage. Because the firearms discovered under the second warrant were the direct result of the unlawful no-knock entry, the appeals court held that they were inadmissible as evidence in the felon-in-possession charge. 91 F.3d 1297 (9th Cir. 1996).

The Supreme Court granted the Government’s petition for a writ of certiorari. In its ruling, the Court rejected the analysis that a higher standard should apply to a no-knock entry when property damage occurs, and it unanimously reversed the Ninth Circuit. The Court reasoned that a no-knock entry is permissible under the Fourth Amendment when law enforcement officers have a reasonable suspicion that an announcement of their presence before entering would be "dangerous or futile or could inhibit the effective investigation of the crime by, for example allowing the destruction of evidence."

The Court acknowledged that the ATF agents and other personnel had a reasonable belief that Shelby, possibly armed and known to be dangerous, was in Ramirez’s house. Those facts alone were enough to justify the unannounced entry, according to the Court. More important, the Court rejected Ramirez’s argument that the property damage, i.e., the broken garage window, changed the lawful no-knock entry into a Fourth Amendment violation. The officer merely waved the gun through the window to deter Shelby and other occupants from resisting arrest.

The Court explained that minor damage and use of force to facilitate a no-knock entry complies with Fourth Amendment standards. However, the Court suggested in passing that unnecessary or major property damage might be viewed differently in a future no-knock entry case.

BOTTOM LINE: Ramirez will face prosecution for possession of a firearm by a felon. Shelby is not expected to appear on Ramirez’s behalf.

IV. Age Discrimination

Oubre v. Entergy Operations, Inc., 66 U.S.L.W. 4118

ISSUE: A Settlement Settles a Case, Doesn’t It?

DECISION: Dolores Oubre worked for Entergy Operations, Inc. (Entergy), for six years, beginning in 1989. On January 17, 1995, Oubre’s supervisor gave her a poor performance evaluation and informed her that if she did not improve in the following year, she would be terminated without benefits. In the alternative, the manager presented Oubre with a voluntary severance package which included a payment of $6,258 based on her salary and years of experience.

Oubre consulted an attorney and fourteen days later she accepted the offer. Oubre signed a document which purportedly waived all rights and claims against Entergy. However, the release failed to mention releasing claims that may be available under the Age Discrimination in Employment Act of 1967 (ADEA). 29 U.S.C. 8 § § 621-634 (1984).

In an apparent change of heart, instead of taking the money and running, Oubre, 41 at the time and covered by the ADEA, kept the money and went to the EEOC to file a complaint. Because the release did not comply with the ADEA, the EEOC gave Oubre a right-to-sue letter. Specifically, the noncompliance was threefold: the release did not give Oubre at least 21 days as prescribed by the statute to consider the offer; it did not give Oubre the minimum seven days after signing the agreement to change her mind; and the release did not expressly state that Oubre was waiving any ADEA claims she might have.

Oubre, armed with her EEOC letter, sued Entergy in federal district court for an ADEA violation. Entergy relied on the severance payment as a defense because Oubre had made no effort to reject and return it. The district court ruled in favor of Entergy and the Court of Appeals for the Fifth Circuit affirmed. The Supreme Court, in a 6-3 decision, reversed and remanded the case.

Initially, the Court noted that the signed release was not enforceable against Oubre because it did not comply with the three requirements as stated above under the ADEA. Furthermore, Oubre’s retention of the severance pay did not amount to a ratification of the release of Oubre’s claims. Oubre was not required to return the monies as a precondition to suing under the ADEA. The ADEA sets out the requirements of a valid waiver of ADEA claims and does not allow for any exceptions. In remanding the case, the Court noted that Oubre could be required to apply the amount of the severance payment against any future recovery she might gain under the ADEA.

BOTTOM LINE: Oubre maintains her suit for damages and keeps the $6,258 severance payment—for now.

V. Sentencing

Muscarello v. United States; Cleveland v. United States (Consol.), 66 U.S.L.W. 4459 (1998).

ISSUE: If I am Unarmed, How Can I Be Carrying a Firearm?

DECISION: It is well known that drug traffickers usually have firearms available in some capacity to protect themselves, their drugs, and the money involved in drug transactions. Because it is the law of the jungle, rather than federal statutes that govern such transactions, the presence and accessibility of firearms are of critical importance to the "success" of the drug trade.

In response to the increasing violence associated with drug trafficking and in an effort to deter such activity, Congress enacted 18 U.S.C. § 924 (c)(1)(1988), which provides that "whoever, during and in relation to any drug trafficking crime . . . uses or carries a firearm, shall, in addition to the punishment for such . . . drug-trafficking crime, be sentenced to imprisonment for five years."

In the first case, Frank Muscarello, a former chief of police, arranged the delivery of approximately eight pounds of marijuana to undercover DEA agents in Tangipahoa Parish, Louisiana. At delivery, Muscarello had a .38-caliber handgun in the locked glove compartment of his truck. Muscarello never used the gun or showed it to anyone. At the arrest, Muscarello admitted possessing the gun, and it was seized. In federal district court, Muscarello successfully relied on the holding in Bailey v. United States, 116 S. Ct. 501 (1995), for the proposition that "use" must show an active employment of the firearm by the defendant. However, the Court of Appeals for the Fifth Circuit reversed, stating that a conviction based on "carrying" a firearm is valid if the evidence shows that the operator of the vehicle knowingly possessed the firearm in the vehicle during and in relation to a drug trafficking crime.

In the second case, Donald Cleveland and Enrique Gray-Santana rented a Mazda 929 to complete a cocaine transaction. At their arrest the police found three loaded handguns under some clothes inside a duffel bag in the locked trunk of the vehicle. The Court of Appeals for the First Circuit took note of Bailey, but applied the ordinary meaning of "carry" to clearly encompass the transport of a firearm in a motor vehicle, even if the firearm was not immediately accessible. The Supreme Court granted the defendants’ respective petitions for writs of certiorari and consolidated the Muscarello and Cleveland cases.

The Court agreed with both appellate courts and affirmed the convictions. The Court based its decision on the plain meaning of the term "carry" as it appears in English dictionaries. According to the Court, "carry" as stated in § 924(c)(1), includes carrying a firearm in vehicles of all sorts, and is not limited to carrying a firearm on one’s person. The Court further explained that its statutory construction of "carry" served the intent of Congress, which was to persuade persons who might commit a drug trafficking crime to leave their guns behind.

BOTTOM LINE: Muscarello, Cleveland, and Gray-Santana will each serve an additional five years in prison as required by § 924 (c)(1). Whether Congress or the Supreme Court can deter drug traffickers from carrying firearms in the future remains to be seen.

Leonard B. Mandell is Assistant Dean at Northern Illinois University College of Law. He is a regular contributor to the ABA’s Preview, a monthly review of cases awaiting argument before the U.S. Supreme Court. He received his Undergraduate Degree in 1972 from the University of Connecticut and his Law Degree in 1976 from Boston College.

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